Second-price auctions with private entry costs
Kaplan, Todd R.
University of Exeter; Ben-Gurion University of the Negev
SSRN Electronic Journal
We study asymmetric second-price auctions under incomplete information. The bidders have potentially different, commonly-known, valuations for the object and private information about their entry costs. The seller, however, does not benefit from these entry costs. We calculate the equilibrium strategies of the bidders and analyze the optimal design for the seller in this environment.